Australians paying $11.5 billion more in home loan interest than last year

Home buyers around a rising interest rate graph.

To say mortgages have crept up is an understatement. With 12 rate hikes behind us and masses of inflation, the Australian Bureau of Statistics estimates that in March 2023, Australians paid $22.2 billion in ‘pure’ home loan interest to lenders. This is a 106.8% year-on-year increase from March 2022, when borrowers only paid $10.7 billion. 

With such a sharp uptick in the cost of housing finance, it’s no wonder that home values have plummeted in the same time frame, remaining -6.9% below the recent peak, according to CoreLogic.

But with rents spiking as well, many buyers have been keen to move into the property market despite the daunting costs. How can they do it?

Three ways to navigate the horrible housing market right now

Collage of people jumping around an envelope of money.

There are no quick fixes when it comes to buying property. Homeownership is a long-term prospect and a significant financial investment requiring a lot of careful planning, research, and number-crunching. 

However, some general workarounds can help make the home-buying process a little smoother. 

  • Look small in unconventional suburbs. Units have proved to be popular choices for buyers priced out of houses. Many suburbs have dodged the worst of the value competition, too. In fact, a lot of what’s driving the current property market recovery is the most expensive end of the market. Look for smaller properties in suburbs with capital growth potential, not just the ones trending now. Your first home doesn’t have to be your forever home! Sometimes you just need a foot in the door. 
  • Get the government (or your friends) to help. The government has just expanded the rules around who can apply for first-home buyer grants. Now, any two people can buy property together with federal assistance, which can bring down the cost of a deposit significantly. If you have a buddy you trust, why not investigate buying together? Just discuss whether y’all’s arrangement will be joint tenancy or tenancy-in-common

Last but not least, always compare home loans before moving on a single offer or property. Getting the home is one thing: paying it off is another entirely.

Compare low-interest rate home loans in the table below.

Compare low rate home loans - last updated 24 April 2024

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  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.01% p.a. variable
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

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  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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  • Fixed Rate Loan with Orange Advantage

    Orange Advantage, Owner Occupiers, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a.
    fixed 2 years
    6.16% p.a.

    Know exactly what your repayments will be, and you can fix your rate for up to 5 years. No monthly, annual fee or transaction fees. Free additional repayments (less than $10,000 p.a.). Valid for loans of $50,000 up to $2,000,000.

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  • Elevate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.20% p.a.

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

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    Details

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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